Casino Stock Swindle

MONTICELLO HORSEMEN STOCK SWINDLE PERPETRATED BY GENTING/RESORTS WORLD

A duplicitous attempt to swindle the Monticello horsemen by driving business away from the racino that supports their purse structure

This is part 3 of my expose series.

You can read part one here, a review of the new Resorts World Catskills https://wizardofvegas.com/forum/gambling-outside-vegas/eastern-us/30357-expose-pt-1-rwcatskills-review/

You can read part two here, a review of the small boutique Monticello raceway
https://wizardofvegas.com/forum/gambling-outside-vegas/eastern-us/30457-expose-pt-2-monticello-racino-review/#post634215

Which begs the question what do these two casinos have to do with each other? Read on!

Monticello Raceway is owned by Empire Resorts (which has no affiliation with Empire Casino in Yonkers) Empire Resorts won the contract to put up the Montreign Casino to be located ten minutes away fron the small boutique racino they owned.

At the beginning of 2017 negotiations began with the primary shareholders of Resorts World NYC to change the name and branding

http://www.recordonline.com/news/20161202/montreign-resort-casino-considers-brand-change

From the article: "In contrast to Resorts Worlds massive international presence, Empire owns the Monticello Casino and Raceway..."

As we know the rebranding was successful. In fact the article ends with Empire Resorts claiming they remain sole owners with the name being simply a paid loan of a brand. This is patently false

https://www.google.com/amp/s/calvinayre.com/2017/04/06/casino/empire-resorts-catskills-casino-resort-world-brand/amp/

To quote: "The whole deal is...one Genting division paying another because Empire...is 88.7% owned by Genting"

With a huge $950 million dollar casino just opening, one might question why keep open the small boutique competition just ten minutes away?

Apparently legislation decrees they cannot
http://www.drf.com/news/monticello-horsemen-secure-seven-years-new-casino-imminent
To quote: "Right now legislation requires there be racing here in order for a casino to operate"

Of course legislation can change if for example a company can show the business is not sustainable. If there is a significant loss of profits one can see an argument made to the state for the necessity of changing legislative requirements

Which brings us to the horsemen. They most definitely have not felt secure in their partnership with Empire Resorts

In 2013 when the initial plans for the Montreign nee Resorts World Catskills project began the horsemen were left out in the cold.

http://www.harnesslink.com/News/Could-Monticello-horsemen-declare-war-on-track-

From the article: "The Monticello Horsemens Association has declared war against Empire Resorts. They argue track owners slammed the door on them once the resort destination amendment was approved in November."

"Horsemen claim Empire Resorts is capping purses at 2013 levels."

"Things are so bad the horsemen have exercised their right to stop Monticellos simulcast signal from being broadcast preventing Empire Resorts from receiving millions in revenue" (the horsemen have this right under federal law...they control who gets their simulcast transmissions)

"...parent company ...flatly refuses to allow the horsemen or breeders to share in any portion of the huge anticipated profits"

Under present legislation horsemen "...get a fixed percentage of the tracks net win. When the racino underperforms, the purse money generated is less, even though it is not the horsemens fault"

This establishes a very important relationship for us. Basically less profits for racino equals less purse money for horsemen legislatively required for the casino to operate. A casino run by a company that has no love lost for the horsemen. A company that wanted to cap horsemens purses at 2013 levels (the horsemens arguments are that with inflation they will be eventually paying more for stables, feed, horses health costs while purses dont rise concurrently)

Sadly the horsemen lost that battle. Purses remain capped today at 2013 levels as mentioned in this article from january 2018
http://www.drf.com/news/monticello-horsemen-secure-seven-years-new-casino-imminent

This article seemingly sounds like the horsemen finally won a concession from Empire/Genting
To quote: "the arrangement granted the horsemen 200,000 shares of the company that can be sold during the period"

That period it should be mentioned is right now. A gap between Resorts World Catskills February opening and December when profits from the Catskills casino begins to be sent to the horsemen. In otherwords, purses still generated from the small boutique casino are all the horsemen have unless they wish to sell off their stock.

To quote: "these shares may be critical to the immediate survival of the Monticello horsemen...only guarantee of the 2018 purse account until funds are implemented from the new casino"

So it would be in Empire/Genting best interest to cause the horsemens stock to drop and force them to sell! And this can be achieved by forcing their purses to shrink by declining revenues at the small boutique racino being operated in direct competition to their huge new investment ten minutes away.

Would the grand opening in FEBRUARY automatically cause a shrinking of profits at the racino? One would assume so BUT if you are on a time clock (with a deadline by December) you may feel the need to help the racino off to an early grave

One method? How about shrinking offers so no one wants to go the racino anymore?

Sounds farfetched? Genting has had a history of doing just this tactic.

Throughout 2012/2013 Resorts World NYC was in a protracted battle with its employees and union. While touting they were the most successful casino on the East Coast and close to a billion dollar a year win, they were paying between $5 and $10 wages (to employees living in arguably one of the most expensive cities in the nation).

Eventually it went to arbitration which demanded they open their books. Instead, Genting capitulated.

https://mobile.nytimes.com/2013/10/28/nyregion/ruling-doubles-paycheck-for-1375-employees-at-high-grossing-queens-slot-parlor.html?_r=0

To quote: "Rather than open its books, Genting conceded that it could pay higher wages"

Whooppee! Workers at the NY Resorts World received pay increases in October 2013

But if you are Genting you dont like to lose this type of fight. How about laying off a couple hundred of those workers? Within three months of their pay raise?

But how to do it without heat from the union? How about getting rid of customers? Claiming there is no choice but to layoff workers due to poor sales?

December 1st, literally one month since the pay increases, a number of changes all occurred on the same day
1) free buffet vouchers were discontinued
2)senior citizen buffet discounts discontinued
3) children banned from entire property(previously families could go eat at the buffet)
4) buffet prices were raised from $16 to $40

It was a unilateral attack on buffet business. And yes it worked, the buffet became a virtual ghost town.

And yes, their tactic to lay off workers was completed less than 3 months since signing the union contract

https://mobile.nytimes.com/2014/01/09/nyregion/after-winning-a-raise-175-casino-workers-in-queens-lose-their-jobs.html

And https://www.google.com/amp/www.nydailynews.com/amp/new-york/laid-off-racino-buffet-workers-demand-jobs-article-1.1569367

Resorts World was even questioned in the article about this but naturally they denied it had anything to do with the union contract pointing to slumping sales at the buffet

It even has led to a lawsuit http://m.qchron.com/mobile/editions/south/laid-off-buffet-workers-suing-resorts-world/article_c978b1a5-497f-5ae1-b8ef-38ff02c6c8bc.html

So we can see this tactic of purposefully ruining business and eliminating sales is a tactic Genting has done before

It appears they are doing it again at the Monticello horsetrack in order to force the horsemen into a stock sale

From the above quoted horsemen article, the 200,000 shares have a value of $5.5million as of January 2018

Interesting number! The monthly net profit from the Monticello Raceway was approximately the same amount ($5.5 million) for all of 2017

This profit was generated thanks to generous freeplay offers totalling over $1million per month

Thankfully we can see those numbers from the NYS lottery website
https://www.gaming.ny.gov/gaming/index.php?ID=2

Here you can download every casinos financials in the State of New York

But here is the pertinent one for us. The one for the Monticello Casino and Raceway



Under freeplay allowance we can confirm (with slight fluctuations) over a million dollars a month in freeplay handed out from April 2017 (beginning of their fiscal year) till September.

A small dip in October to $908 thousand

Followed by a huge drop every month culminating in a shrinkage of offers in January 2018. From January on the freeplay offers were only about a quarter million per month. Thats a 75% drop in their offers!!!

Did it have a direct affect on their bottom line? Absolutely! Examine the concurrent net win for the casino. From April to October the casino was averaging $5.5 million per month (that convenient number of stock value awarded to the horsemen)

Look at the sharp drop off as the freeplay offers dried up. Within three months the Monticello Racino is repeatedly making only about $2-3 million. A 50% and more drop in profits (gee I wonder whats happening to the horsemens purses and stock right about now)

I am sure Empire/Genting assumed no one would notice. And there is always plausible deniability right? The opening of the new casino ten minutes away could be blamed for the drop in profits

WAIT! The opening in February affected profits the month before in January?

With such a time sensitive angle (swindling the horsemen) Empire/Genting simply couldn't wait. They implemented their plan just a few months too early

But hey whos gonna notice?

Quote: darkoz

But hey whos gonna notice?

Can you give us a three sentence summary? Too long to read. Short attention spans here.....

I read a good majority, though admittedly right now just don't have time to go through each of the links...

So do you think casinos/investors are building up then shorting their own company stock, then driving the company in to the ground for massive profits on their shorts? aka insider trading?

Quote: SOOPOO

Can you give us a three sentence summary? Too long to read. Short attention spans here.....

I added a newspaper style headline at the top of the op

Hope that helps

Quote: Romes

I read a good majority, though admittedly right now just don't have time to go through each of the links...

So do you think casinos/investors are building up then shorting their own company stock, then driving the company in to the ground for massive profits on their shorts? aka insider trading?

Possibly

The gist of the article is the horsemen were granted $5.5 million in shares after a lengthy battle to gain a share in profits from the new megacasino. Profit sharing kicks in December

At the small racino Freeplay was dropped by 75% directly after. Gambling revenue took a 50% hit.

The horsemen get their purse money from the revenue. Their purses have in essence dropped 50%

It appears to be an attempt to force the horsemen to sell their stock before December when the profit sharing kicks in

The logical conclusion is that the OP is salty that his free play was cut and is trying to point fingers. Sometimes you just have to take it on the chin.

Quote: tongni

The logical conclusion is that the OP is salty that his free play was cut and is trying to point fingers. Sometimes you just have to take it on the chin.

Its only an AP who would notice :)

If it weren't for the casino, the track would have shuttered years ago., or at best, still been paying next to nothing in purses like it was doing in the 90s.

Quote: darkoz

So it would be in Empire/Genting best interest to cause the horsemens stock to drop and force them to sell! And this can be achieved by forcing their purses to shrink by declining revenues at the small boutique racino being operated in direct competition to their huge new investment ten minutes away.

The wording in the DRF piece is confusing. The article seems to suggest the shares have a minimum value of 5.5 million.

Are you suggesting the value of the shares could be lower?

From the DRF article:
"Fortunately the arrangement also granted the horsemen 200,000 shares of the company that can be sold during the period. The value of those shares can be no less than $5.5 million and could go higher or lower based on stock price. “Right now they’re worth around $5.5 million,” said Schwartz."

Quote: Keeneone

The wording in the DRF piece is confusing. The article seems to suggest the shares have a minimum value of 5.5 million.

Are you suggesting the the value of the shares could be lower?

From the DRF article:
"Fortunately the arrangement also granted the horsemen 200,000 shares of the company that can be sold during the period. The value of those shares can be no less than $5.5 million and could go higher or lower based on stock price. “Right now they’re worth around $5.5 million,” said Schwartz."

Yea thats confusing but the second part is correct - the stock can go higher or lower. Its pointed out in a later paragraph the stock can go down

The stock can go down but they may have a guaranteed minimum of $5.5.
I invested in the early going, loved the stock symbol NYNY and have an affection for the surrounding area. There are some great old houses nearby.
It's been a disaster from the get go. Bad gaming and horrible racing. Sold a long time ago at a significant loss and haven't looked back.

Quote: billryan

The stock can go down but they may have a guaranteed minimum of $5.5.
I invested in the early going, loved the stock symbol NYNY and have an affection for the surrounding area. There are some great old houses nearby.
It's been a disaster from the get go. Bad gaming and horrible racing. Sold a long time ago at a significant loss and haven't looked back.

I see

Nonetheless the purses come from profits at the racino until december. Those profits have been cut in half due to freeplay being drastically cut

So the plan seems to be convince the horsemen to sell their shares at the guaranteed minimum prior to december when the purses begin to be funded by the new Resorts World Catskills facility

Good article, thanks. So good that I don't have any cross talk.

I'm not really seeing the scheme you are. The level of racing there is atrocious most of the year, the purses were only high because the money from the casino.
The last group I'd want to be business partners with would be these folks, so they are pretty much screwed either way.

Quote: billryan

I'm not really seeing the scheme you are. The level of racing there is atrocious most of the year, the purses were only high because the money from the casino.
The last group I'd want to be business partners with would be these folks, so they are pretty much screwed either way.

Strangely I think you are seeing it

The purses are only high because of the casino. The owners of the casino also dont want to do business with the racetrack. Legislation is forcing them to unless they can convince the horsemen to divest their stock

Casino profits have been cut in half which means purses are cut in half

Quote: Wizard

Good article, thanks. So good that I don't have any cross talk.

Thank you

Much appreciated

They are trying to kick their step children out of the basement.